Instead of going cap-in-hand to Manitobans, the province's power utility should be doing more to encourage people to conserve energy.

But the opposite appears to be happening, the Public Utilities Board heard Thursday as it nears the end of its four-week-long hearing into Manitoba Hydro's request for a 3.5 per cent rate hike, effective April 1.

Montreal energy consultant Philippe Dunsky told the three-member PUB panel that Hydro, once considered the industry leader in its Power Smart energy-saving program, appears to be taking a giant step backward in what it plans for conservation savings for the next decade.

"The steep planned decline announced in the Power Smart plan... will likely place it among the laggards in North America within a few short years," Dunsky said in his report. Dunsky was commissioned by the Manitoba branch of the Consumers' Association and the Green Action Centre.

He compared Hydro's 2010 savings through energy-efficiency programs to those offered by utilities in 48 states and four provinces. He then narrowed it down to planned savings for 2015 against utilities in British Columbia, Minnesota, Massachusetts, Vermont and Nova Scotia.

Dunsky said his analysis showed Hydro's 2010 performance was in the bottom half of North American utilities and planned savings for 2015 is 70 per cent to 88 per cent lower than the five utilities. In those, savings targets range from one per cent to 2.6 per cent of current sales, but Hydro's planned savings are 0.3 per cent in 2015, declining to 0.2 per cent in 2020.

Dunsky told the PUB panel Hydro should be trying to get a bigger bang for its buck out of Power Smart, which would reduce pressure on rate increases.

"Ultimately, energy efficiency is a resource," he said.

Hydro has countered that Dunsky's numbers are off -- efforts were underway Thursday for Hydro to supply corrected numbers to him -- and that he did not consider Manitobans have the lowest electricity rates in North America, making it a tougher job to get them to conserve power.

The Consumers' Association and the Green Action Centre argue if more effort was put into energy conservation -- encouraging more people to insulate drafty basements or replace electric heat with geothermal units -- that would reduce consumption in Manitoba and allow more surplus electricity to be sold for export. That reduces the need for the new Keeyask and Conawapa generating stations and the prospect of future rate increases. Hydro is planning annual increases of 3.95 per cent for the next 18 years.

"Manitoba has not really plumbed the depth of every kilowatt hour that could be saved yet," Gloria Desorcy, executive director of the consumers' association, said.

The Green Action Centre's Peter Miller said Hydro is too conservative in its estimates of what can be achieved through energy-efficiency programs.

"The achievable is only a fraction of what could happen," Miller said.

Desorcy and Miller said Hydro could develop efficiency programs for renters and for First Nations and do a better job of promoting compact fluorescent bulbs and geothermal heat pumps to the 60,000 Manitobans who currently use electric heat.

Manitoba Hydro spokesman Glenn Schneider said after the hearing Hydro is not getting enough credit for some of the conservation programs it pioneered in the 1990s.

He also said if Manitobans had high power rates like in Vermont, then Manitobans would be more inclined to install new windows or a higher-efficiency furnace.

"If our rates were double and higher than we have now we'd have more room to try to achieve more conservation," he said, adding Hydro does not want to be put in a position where the cost of running its conservation programs is passed on to consumers through another rate hike.

Talk of a fourth transmission line came up at a recent Public Utilities Board hearing into Hydro's latest rate-increase request.

David Cormie, Hydro's division manager of power sales and operations, said a fourth transmission line from the north will be needed when the $10.2-billion Conawapa generating station comes into full service in 2025-26.

But it won't be anything like Bipoles I, II and III and not as expensive as the estimated $3.28-billion cost to build Bipole III down the west side of the province. The province's Clean Environment Commission is currently conducting hearings into Bipole III.

Cormie said at this time Hydro has already put $318 million in its capital expenditure forecast for the additional transmission.

Why the cost difference?

Bipoles I, II and III are high-voltage direct-current transmission lines. Simply, turbines in the northern dams produce electricity in alternating current (AC). For efficient transmission, its converted to direct current and converted back again to AC for consumption.

Cormie said what Hydro plans to do when Conawapa is up and running is build or upgrade already existing AC transmission towers that also run from the north to southern Manitoba.

That could involve upgrading the line capacity from 230 kilovolts to 500. The additional capacity is needed to sell Conawapa's power on the export market.

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